Government Response To The Great Depression

Government Responses
During the Great Depression, Canada’s federal governments were slow to respond effectively to the crises that were provoked. Mackenzine King’s government (1925-30) felt it was best to leave the problems alone; he believed in laissez- faire, in other words the economy would get fixed on its own. King was impassionate in balancing the budget and a limited government role. He also believed that the downturn was caused by the business community and an adverse climate cycle, which led to the drought and the Dustbowl. King thought the depression would make a comeback on its own by international trade. Therefore, he was against any polices that would raise tariffs, he also refused to give money for relief to Tony or Conservative
run causing King’s party to lose the election of 1930 on his first term.
The Conservative led by R.B, Bennett promised the people of the consideration of helping out the unemployed. His polices were traditional and based on relief and higher tariffs. The government adopted public loans. The National service Loan was set up to borrow $150 million and the government was able to meet its financial commitments to keep operating. Bennett proposed the Unemployed and Farm Relief Act of 1931, Public Works Construction Act of 1934, Farmers Credit Arrangement Act 1934 and Relief camps. The Unemployed and Farm Relief Act, was when the government distributed $20 million for emergency reliefs. Bennett was to devote over $28 million to offer relief and public works and create jobs every year of his premiership. He introduced a federal building programme of $40 million to create jobs, national parks and historic sites. Farmers Credit Arrangement Act allowed farmers to stay in their farms rather than having to evict through foreclosure by allowing them to make agreements about delaying their payment. Relief camps were for hoboes that were around Canada in search for work. The camps were run by the Canadian Department of National Defence along military lines they offered food, clothing and work to the homeless, single and unemployed but many jobs were labored such as constructing roads that didn’t lead anywhere so they were pointless. Tariffs were increased to protect Canadian production but the reason was to limit trade even more. They may have saved some firms from bankruptcy, but they did little to help export and Canada clearly need to export its good. The growth in federal responsibilities for Bennett was the setup of National Radio Broadcasting Service and the Central Bank. These important developments showed that he would’ve rather had British models than American ones. After all Bennett’s response to the Depression was frightening. It seemed to be that there was no sign for hope but it was something that Canada nor other nations had not experienced.
Due to the Depression both King and Bennett viewed the results differently.
Bennett went to the extent to propose a Canadian version the New Deal as a different solution since he realized that the economy would not solve its own problems itself. His other proposals were Farm credits, Federal by election and Horse drawn Fords. He was influenced by his brother in law, William Kerridge that was an ambassador to the USA, he was inspired of Roosevelt’s New Deal because he believed the only way capitalism could be saved was by direct government intervention. The New Deal consisted of Employment and Social Insurance Act that provided unemployment insurance and allied benefits. Therefore, Bennett hoped that his proposal to the New Deal happened quickly, so that the Liberals would not rejected it and would have elections quicker. In Mackenzie King’s 2nd term (1935-1948) he returned as a prime minister. He belittled Bennett’s proposal of the new deal and still went with traditional economic policies. However, he did realize without federal support the economy would not right itself. He gave up on the idea of balancing budget. In the late 1920’s King was attentive to the economic policies and felt that the economy should be left alone. By 1934 King came up with an idea to create a Central Bank with more authority than the Bank of Canada to have control over the money supply. Even though his plan didn’t go on for so long, he wanted to restore the international trade. Most Canadians were looking for federal government rather than for relief for the reason of realizing only the federal government had the resources. Therefore, the Depression displayed that the Canadian system was not able to manage and needed to be
reformed.

Overall, the Canadians and Americans got themselves in about the same situation, causing the Depression. Both Federal Government Mackenzie King and R.B. Bennett did their best to upraise their country from the effects of Depression. Even though these men were there to help, their help took longer than any other countries. Therefore, Canada was hit harder by the Depression because they were on their own and couldn’t depend on other countries because they were in the same situation. After, Bennett introduced the New Deal, King’s attention was to focus on international developments, but what helped end the Depression was going to war.